2U (TWOU) Stock Trades Up, Here Is Why

What Happened:

Shares of online education platform, 2U (NASDAQ:TWOU) jumped 6.86% in the after-market session after the company reported first-quarter revenue in line with analysts' expectations although EBITDA and free cash flow beat. Full year revenue guidance of ~3% growth was reiterated while EBITDA guidance was raised, which is a positive. Additionally, the company provided further information on the lawsuit filed against the Department of Education (DoE), clarifying that the complaint would be much less arduous (and less expensive) for the Company than a more involved suit.

What is the market telling us:

2U's shares are very volatile and over the last year have had 100 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

2U is down 12.2% since the beginning of the year, and at $5.52 per share it is trading 56.9% below its 52-week high of $12.81 from February 2023. Investors who bought $1,000 worth of 2U's shares 5 years ago would now be looking at an investment worth $69.

Is now the time to buy 2U? Access our full analysis of the earnings results here, it's free.